Predatory Lending
The Ethical and Moral Issues of Predatory Lending
Caryn Williams
Southern New Hampshire
Business Law
Gerri Drelling
August 24, 2014
Abstract
From childhood to adulthood, we have been taught that part of achieving the “American dream’ is owning a home. How will the worth of that dream be altered after absorbing hundred of billions of dollars in losses incurred from the subprime mortgage crisis (Ruzich and Grant, 2009). Moreover, many potential homeowners saw subprime loans as a means to achieve this dream. In many cases, consumers had no idea what the long term effects would be with making this particular choice. In correlation, the financial crisis forced these same consumers to use payday loans a means to supplement income. Unfortunately, both loans are laced with incentives and high interest rates that translated into predatory lending. These issues were the driving force behind the collapse of the subprime market and ultimately the economy. My mind sometimes wonder if everyone involved in the crisis had exercised some moral and ethical self-control, the crisis could have been avoided.
The Ethical and Moral Issues of Predatory Lending
The Effects of Payday Loans to Consumers
The payday lending industry has grown by leaps and bounds over the years. This trend reflects the rampant economic insecurity and market neglect by the traditional banking sector. These payday lender and similar outlets are now commonplace in many communities across the United States. The past decade has seen a significant increase in economically distressed areas and areas where predatory mortgages are rampant.
All the banking institutions say the politically correct things about race and equality. They all offer diversity programs. Many financial institution support liberal causes. Yet, many analysts feel that the banking industry covertly uses payday lenders as a smoke screen, a way to prey on minorities without getting their hands dirty. It’s a chain
Caryn Williams
Southern New Hampshire
Business Law
Gerri Drelling
August 24, 2014
Abstract
From childhood to adulthood, we have been taught that part of achieving the “American dream’ is owning a home. How will the worth of that dream be altered after absorbing hundred of billions of dollars in losses incurred from the subprime mortgage crisis (Ruzich and Grant, 2009). Moreover, many potential homeowners saw subprime loans as a means to achieve this dream. In many cases, consumers had no idea what the long term effects would be with making this particular choice. In correlation, the financial crisis forced these same consumers to use payday loans a means to supplement income. Unfortunately, both loans are laced with incentives and high interest rates that translated into predatory lending. These issues were the driving force behind the collapse of the subprime market and ultimately the economy. My mind sometimes wonder if everyone involved in the crisis had exercised some moral and ethical self-control, the crisis could have been avoided.
The Ethical and Moral Issues of Predatory Lending
The Effects of Payday Loans to Consumers
The payday lending industry has grown by leaps and bounds over the years. This trend reflects the rampant economic insecurity and market neglect by the traditional banking sector. These payday lender and similar outlets are now commonplace in many communities across the United States. The past decade has seen a significant increase in economically distressed areas and areas where predatory mortgages are rampant.
All the banking institutions say the politically correct things about race and equality. They all offer diversity programs. Many financial institution support liberal causes. Yet, many analysts feel that the banking industry covertly uses payday lenders as a smoke screen, a way to prey on minorities without getting their hands dirty. It’s a chain
Cited: Cracking Down on Predatory Payday Lenders. (2013, August 29). Retrieved from The New York Times: http://www.nytimes.com/2013/08/30/opinion/cracking-down-on-predatory-payday-lenders.html?_r=0 Denning, S. (2011, November 11). Lest We Forget: Why We Had A Financial Crisis. Retrieved from Forbes: http://www.forbes.com/sites/stevedenning/2011/11/22/5086/ Grant, C. R. (2009, August 1). Predatory Lending and the Devouring of the American Dream. Retrieved from Wiley Online Library: http://onlinelibrary.wiley.com/doi/10.1111/j.1542-734X.2009.00704.x/abstract;jsessionid=DEECA3438181EBBD0B60C251E6F795FF.f01t04?deniedAccessCustomisedMessage=&userIsAuthenticated=false Jennings, T. a. (2013). Business Law Principles for Today 's Commercial Enviroment. Connecticut : Cengage Learning. Singletary, M. (2014, March 25). The trap of payday loans can lead to triple-digit interest rates. Retrieved from The Washington Post: http://www.washingtonpost.com/business/the-trap-of-payday-loans-can-lead-to-triple-digit-interest-rates/2014/03/25/ca1853dc-b471-11e3-8cb6-284052554d74_story.html Victimizing the Borrowers: Predatory Lending’s Role in the Subprime Mortgage Crisis. (2008, February 20). Retrieved from Wharton University of Pennsylvania: http://knowledge.wharton.upenn.edu/article/victimizing-the-borrowers-predatory-lendings-role-in-the-subprime-mortgage-crisis/